THE SCENARIO
Last week, we looked at Sarah's desire to buy a house, and figured out how much a bank would lend her. What we didn't cover, however, is that lenders typically require down payments when they give people loans. The simplest case is that most of the time, banks require you to come up with 20% of the value of a property, and they'll lend you the other 80%.
So let's say that a bank will lend Sarah $360,000 to buy a house, and that constitutes 80% of the total purchase price of the house. Sarah will have had to have come up with a down payment if she wants to buy it. Fortunately for Sarah, she's been investing money for some time now with the anticipation of wanting to make a major purchase like this.
The Question: If Sarah has inv...
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